As the threshold of the Alpha project becomes higher and higher, the chain frequently encounters "mines" such as gas fee explosion and excessive slippage, and the vigorous "score brushing tide" in the square has gradually died down. It seems to have returned to the San Francisco Gold Rush era more than 100 years ago - when gold diggers from all over the world flocked to it, the ones who finally made a lot of money were not the miners, but the merchants selling shovels and jeans.
As the threshold for Alpha projects continues to rise, frequent on-chain gas fee explosions and significant slippage are becoming 'landmines'. The once-booming 'score brushing craze' in the plaza has gradually quieted down. It feels like we've returned to the Gold Rush era in San Francisco over 100 years ago—when gold miners flocked in, it was not the miners who ultimately made a fortune, but rather the merchants selling shovels and jeans.
Today, the gas consumption for score brushing on-chain and the liquidity value provided by users far exceed the final airdrop benefits. Score brushing is like gold mining; everyone wants to dig the first pot of gold, but those who truly make significant profits are often the ones quietly 'selling shovels'. So, the question arises: who are the big winners 'selling shovels' in the crypto circle?
Today's insights may change your understanding.
A more stable and profitable way than score brushing—earning the funding fee from contracts. This is a truly low-risk arbitrage strategy; let's look at an example from Chimes.
Case Study: Funding fee for BTCUSDT
As of the submission deadline, the funding rate for BTCUSDT is 0.0047% (charged every 8 hours), which seems like a negligible number. But it's important to note that for many, the largest hidden cost of contract trading is this—funding fees.
And today's main character $LAYER , the funding rate is directly maxed out: -1.091% (charged every hour)! Friends sensitive to numbers should have already caught on—this means that as long as you stand on the right side, you can steadily rake in money every hour.
Cost: (taking 10000U as an example)
Hedging: 5000U contract (going long, earning negative funding fees) + 5000U leverage (going short, hedging with the contract)
The cost of borrowing coins for leverage shorting is 0.02% per hour (1U interest per hour, 0.02% * 5000U = 1U)
Contract order fee (closing) = 5000 × 0.00018 = 0.9 USDT
Contract taker fee (opening) = 5000 × 0.00045 = 2.25 USDT
Total contract fees: 3.15 USDT
Leverage interest (i.e., the borrowing cost for shorting Layer)
Tip: As Layer's current borrowing capacity has been exhausted, estimating based on the maximum interest rate, it is calculated at 0.02% per hour.
Layer contract fee earning simulation: (funding rate data sourced from BN exchange)
The total profit shown in the chart needs to deduct the trading fee of 3.15U for the contract, resulting in a return of over 800+ U. Alpha is like working at a high-pressure job, where you have to brush scores and worry about high slippage (to reduce slippage, refer to previous articles), while also rushing to sell to prevent a flash crash in coin prices. The hard-earned daily score brushing of 1024u/2048u ultimately yields only a small fortune.
In light of the previous article, some people do not understand 'hedging' and do not calculate various rates carefully, so let me explain briefly.
The role of hedging: Regardless of the rise or fall of the coin, the corresponding U remains unchanged. 5000U spot/5000U contract (default 1x contract), if the spot rises by 25%, the contract shorts correspondingly falls by 25%, you still hold 10000U.
Risk Warning (don’t skip!)
This article lists all fees (manual contract closing/leverage may have time differences leading to price fluctuations, which can be largely ignored)
There may be time differences when closing/opening positions, and price fluctuations can affect returns.
Extreme market conditions or exchange system issues may lead to order slippage/failure.
Errors in contract/leverage operations may also lead to losses.
I am Chimes, who loves research. If you find this article useful, please like, follow, and support me; your support is my motivation for updates. If you have any questions or suggestions, see you in the comments.
(This article involves API trading: monitoring fee changes announcement (Layer), Bot operates through API contracts and lending to reduce slippage. If you're interested, you can contact me)
***Supplement*** (2025-5-7 16:26)
Some friends in the comments mentioned they couldn't borrow coins. Let's broaden our thinking: there are more exchanges than just BN, and there are also on-chain DeFi lending platforms. Last month, during the TGE hype for BNB, weren't we all discussing how to borrow BNB? 😀
Tip: It's not just Layer; there are other coins, but the relative returns are a bit lower.
Classwork
When the contract fee is positive, how should we arbitrage?
***Supplement*** (May 8, 1:13)
Layer is already a thing of the past; go check out $KAITO and bank, just find a pool to play with, don’t waste time on Binance. If you don’t understand what hedging arbitrage is, I won’t explain it again; just look it up online 🔍.